It's now been more than a year since BlackBerry (NYSE:BB) launched its BlackBerry 10 platform. As a shortcut to greater app availability, the Canadian smartphone maker included Android compatibility to launch the platform with 70,000 apps. There are long-term concerns with this strategy, as BlackBerry couldn't piggyback on Google's success forever. Well, now it wants to piggyback on Amazon.com (NASDAQ:AMZN).
BlackBerry has now announced that it will tap into the Android-based Amazon Appstore with BlackBerry 10.3, which will launch this fall. Just this week, Amazon said its repository has grown to 240,000 apps and games, and all of those apps will become available on BlackBerry's platform. That's significantly more than the roughly 130,000 apps that BlackBerry currently offers through its App World. It gets even worse when you remember that nearly 50,000 of those are junky apps made by a single developer.
One of BlackBerry 10's greatest weaknesses has been a lack of high-profile apps that are standard on other platforms. Netflix has been holding out from the beginning, and other popular apps, like King's Candy Crush Saga, also aren't available. Partnering with Amazon will help to partially fill this void, as many of these titles are available through its Appstore. CEO John Chen believes the move will also enhance productivity for enterprises, something Candy Crush Saga is known for.
A lack of app content is one reason why BlackBerry 10 sales have been nothing short of dismal -- and getting worse before they get better. Only 1.1 million of last quarter's device sell-through were BB10 devices, with the remainder being older BB7 phones. The company only recognized revenue on 1.3 million units as it's been trying to work through its channel inventory.
BlackBerry is set to report fiscal first-quarter earnings tomorrow. Investors are already expecting $0.25 per share in red ink, along with a shrinking top line. Instead, the focus will be on Chen's continued turnaround efforts as he works to strengthen BlackBerry's software and security to defend its enterprise turf.
Piggybacking on other platforms is not a good long-term solution; yet this will be the third time that BlackBerry has done exactly that. By relying so heavily on ported and "wrapped" apps, the operating system itself becomes little more than a window to another platform. Of course, all platforms would prefer a large stable of native apps, which offer better performance. But in BlackBerry's case, it simply can't get enough developer support, in part, because the company has such a small installed base.
Evan Niu, CFA has the following options: short January 2015 $280 puts on Amazon.com and long January 2015 $250 puts on Amazon.com. The Motley Fool recommends Amazon.com, Google (A shares), and Google (C shares). The Motley Fool owns shares of Amazon.com, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.